Page:United States Statutes at Large Volume 48 Part 1.djvu/760

 734 73d C ONGRESS. SESS. II. CH. 277. MAY 10, 1934 . INCOME TAX. From the amount of gross premiums written on insurance con- INSURANCE COMP ANIE S- tracts during the taxable year, deduct return premiums and Could. Computation of. premiums paid for reinsurance. To the result so obtained add u near ned prem iums on outs tand ing busi ness at the end of the p rece ding tax able yea r and de duct une arne d pr emiu ms on ou t- standing business at the end of the taxable year "Losses incurred .• (6) LOSSES INCURRED ." Losses in cu rre d " means l osses in curred during the ta xabl e ye ar on in sura nce cont ract s, c ompu ted as follows Computation of . To losses paid during the taxable year, add salvage and rein- surance recoverable outstanding at the end of the preceding tax- ab le year, and deduct salvage and reinsura nce recove rable outstanding at the end of the taxable year . To the res ult so obtained add all unpaid losses outstanding at the end of the taxab le year and deduct unpaid l osses outstanding at the end of the preceding taxable year ; `uri penses in- (7) EXPENSES INCURRED." Expenses incurred " means all expenses shown on the annual statement approved by the National Conve ntion of Insurance Commissi oners, and shall be comput ed as follows Computation of . To all expe nses pai d du ring the tax abl e ye ar add e xpen ses unpaid at the end of the taxable year and deduct expenses unpaid Net income . at the end of the preceding taxable year . For the purpose of computing the net income subject to the tax imposed by this sec- tion there shall be ded ucted from expen ses i ncurr ed as defin ed in this paragraph all expenses incurred which are not allowed as deductions by subsection (c) of this section. Deductions allowed . (c) DED UCT ION S ALLOWED .-In computing the net income of an insurance company subject to the tax imposed by this section there shall be allowed as deductions Business expenses. (1) All ordinary and necessary expenses incurred, as provided Ante, p 6S in section 23 (a) ; Interest. (2 All interest as provided in section 23(b) ; Taxes . 3) Taxes as provided in section 23(c) ; L osses. (4) Losses incurred as defined in subsec tion (b) (6) of this section ; Losses from sales ; (5) Subject to the limitation contained in section 117(d), losses it Ante, on 715 sustained during the taxable year from the sale or other disposi- tion of property ; Worthless debts. (6) Bad debts in the nature of agency balances and bills receiv- ab le a scer tain ed to be wor thle ss and c harg ed off within the taxable year ; Dividends from cor- (7) The am ount rec eive d as div iden ds f rom corp orat ions as porations. provided in section 23 (p) ; E xempt intere st. (8) The am ount of inte rest ear ned duri ng the t axab le y ear Ante, p .687 . which under section 22(b) (4) is excluded from gross income ; E xhaust ion, e tc ., of (9) A reason able all owance f or the e xhaustion, wear a nd tear of property. property, as provided in section 23(1). D educ tions all owed foreign, corporations for (d) DEDUCTIONS OF FOREIGN CORPORATIONS .-In the case of a for- UnitedStatesbusiness . eign corporation the deductions allowed in this section shall be post, p . 737 . allowed to the extent provided in Supplement I. Dup licati ons pr ohib (e) DOUBLE DEDucTIoNs .--Nothing in this section shall be con- Computations . C o m p u t a t i o n s. strued to permit the same item to be twice deducted. Credits against net (f) For the p urpo se o nly of the tax i mpos ed by th is s ecti on income. Ante, p. 632n there shall be allowed as a credit against net income (or, in the cas e of a for eig n corporation, ag ain st net. income from sources within the United States) the amount received as interest upon obli- gations of the United States or of corporations organized under